How Honest Is the Richter Market?

The Master, Judd Tully, tries to explain the updraft in the market for Richter abstract paintings even as Richter’s dealer tries maintain the idea that Richter’s market is somehow more of an “honest” market than others that are supported by buyers of last resort. Of course, that’s not the way a market works.

Market makers might provide liquidity—in the form of bidding for works at auction—or scarcity, in the same form, by bidding for works at auction. But that does not make the market more or less honest. Having real information about the number of works, makes a market honest. And Tully provides that in his story:

During the 1960s, Richter produced some 28 abstract paintings, according to the online archive meticulously compiled by the Swiss collector Joe Hage. The census of abstract pictures jumps to 151 for the 1970s and grows much larger in the 1980s, when Richter produced 201 abstract works in various sizes in the first half of the decade and 344 works in the second half.

Tully also points to the existence of liquidity buyers:

A speculative motive was certainly evident in the midseason sale at Sotheby’s London in February, when Richter’s “Abstraktes Bild,” 1995, measuring a scant 22 by 20 inches, sold for £959,650 ($1.5million). The seller, Paris dealer John Sayegh-Belchatowski, literally doubled his investment, having bought the painting just two months earlier at Paul Kasmin’s stand at Art Basel Miami for $750,000. The dealer bought a second, similarly scaled Richter from Seoul’s Kukje Gallery in Miami for a similar price and resold it in a private transaction in March at a comparable profit.

The real question is whether anyone can be sure that there are no bidders acting to create scarcity in the Richter market. No dealer or collector has made a public show of supporting the market for abstract paintings. Is that definitive proof? Obviously not.